Pennsylvania Life Insurance Practice Exam

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• Dividends can be used to purchase paid-up additions.
• Who represents the insurer in selling life insurance and negotiating contracts?
• Common disaster clause effect when both insured and beneficiary die in the same event?
• An interest-sensitive life policyowner may withdraw the policy's cash value without charge under a provision called?
• What type of life insurance policy has cash values that vary with investment performance?
• Which of the following is not typically considered an unfair claims practice?
• What is collateral assignment in life insurance?
• Which entity is responsible for monitoring compliance of insurers with state law in Pennsylvania?
• The living benefit option that allows access to part of the death benefit early is the:
• Which of the following is an annuity that is linked to a market-related index?
• The Fair Credit and Reporting Act's main purpose is to
• An insurance producer is often responsible for field underwriting during the application process. All of these are possible field underwriting roles EXCEPT
• The free-look provision gives the policyowner
• A licensee can have his/her license denied or revoked by the Commissioner if
• An Accelerated Death Benefit in Pennsylvania must be at least what percentage of the total death benefit?
• A spouse and child can be added to the primary insured's coverage as what kind of rider?
• Insurable interest is a component of which contract element?
• Adverse selection occurs when...
• Accidental death rider provides what?
• Under Pennsylvania law, which statement about equity-indexed annuities is true?
• Which underwriting class includes higher risk with higher premiums or riders?
• The coverage, conditions, and limitations in the master policy of a group contract can be found in which document?
• Which group in Pennsylvania must complete continuing education for license renewal?
• What happens if a policy lapses and is reinstated?
• What is the purpose of the free look/initial review clause?
• A beneficiary has just received a claim payment for a life insurance policy. Which statement is true regarding federal income tax liability owed?
• Which of these riders will pay a death benefit if the insured's spouse dies?
• In Level Term life insurance, what does the term "level" describe?
• Policy loans may be tax-free if the policy remains in force.
• Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's
• The promise of a discount in premium as an inducement to purchase insurance is an Unfair Trade Practice known as
• During the accumulation period, a surrender of an annuity results in receiving which of the following?
• Under which beneficiary designation would the consent of the beneficiary be required to make changes?
• Which of the following policies does NOT build cash value?
• What distinguishes variable life insurance from other forms?
• A rollover from a Traditional IRA to another IRA must be completed within 60 days to avoid tax consequences; what is the effect if not completed?
• In a life insurance policy, the face amount is best described as
• The free look period provided in a life insurance policy is usually
• Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity?
• Which of the following is a responsibility of the Pennsylvania Insurance Department?
• What is a spousal rider?
• If age misstated on the application, which statement is correct regarding the death benefit?
• Which condition must precede revocation of a producer's license?
• Viatical settlement brokers send packets of information to potential viatees. These information packets normally include existing policy terms and which of the following?
• All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT which?
• Pennsylvania law requires that an insurer must notify the Commissioner of a producer appointment termination within
• Legal purpose is a term used in contract law meaning
• Which military service exclusion clause would pay upon the death of an active duty serviceman killed while on leave?
• A transaction in which a new life insurance policy is purchased and an existing life policy is surrendered is called
• Which of the following is a violation of Pennsylvania insurance law?
• Which statement best describes nonguaranteed values in a life insurance illustration?
• What is considered to be the primary reason for buying life insurance?
• Which provision ensures that a copy of the application accompanies the policy upon issuance?
• What describes replacement in life insurance?
• Which term describes a person not acceptable at standard rates because of health history, occupation, or hobbies?
• Which rider provides term coverage for the insured's spouse under a policy?
• Paid-up additions in a participating policy increase which of the following?
• Term to permanent conversion: how is conversion from term to permanent typically accomplished?
• When a producer offers something of value in return for the purchase of an insurance policy, which prohibited sales practice has been committed?
• How do interest earnings accumulate in a deferred annuity?
• What is the living benefits concept in life insurance?
• To reinstate a lapsed policy, which combination of actions is typically required?
• Craig purchased a life insurance policy to enable his heirs to pay estate taxes. This is called
• The Pennsylvania Insurance Department is responsible for each of the following EXCEPT?
• According to Pennsylvania law, which of the following is NOT considered to be personally identifiable financial information?
• What is a term rider?
• All of the following are considered appropriate uses of life insurance for business purposes EXCEPT
• What does reinstatement allow a lapsed policy owner to do?
• If a policyholder borrows against the cash value, what typically happens to the death benefit?
• Ambiguities in an insurance policy are resolved in favor of which party?
• What is misstatement of age/gender resolution?
• Which of the following describes someone who is not acceptable at standard rates due to health history or lifestyle?
• Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?
• Ambiguities in a policy language are interpreted in favor of which party?
• Under a Modified Endowment Contract, which item is not subject to income taxation?
• Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
• Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death?
• In Pennsylvania, what's the requirement for a minor to receive proceeds from a death benefit?
• Which retirement plan is funded with after-tax contributions and offers tax-free qualified withdrawals?
• The policy’s growth in cash value may be tax-deferred.
• Survivorship life policy is designed to provide benefits following which event?
• What is policy loan interest rate?
• If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies?
• Which action would the Commissioner take against a licensee for fraud or dishonesty?
• What is the free-look period typically in PA?
• In Pennsylvania, an insurance producer license can be denied for failure to pay each of the following EXCEPT?
• A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called
• If a policyholder cancels within the free-look period, what refund do they receive?
• The premium for a Modified whole life policy is
• In a group life contract, the certificate of coverage and benefits serves what purpose?
• What happens to the collateral assignment when the loan is repaid?
• Which statement about death benefits and cash value growth is accurate?
• Under a contract of adhesion, which statement accurately describes acceptance terms?
• In an insurance contract, the element that shows each party is giving something of value is called
• Which policy part typically lists the insured’s personal details, the benefits, and the policy period?
• Death benefits paid to beneficiaries are typically income-tax-free.
• A plan in which an employer pays insurance benefits from current revenues is known as
• In Pennsylvania, what responsibilities do licensees have regarding privacy notices?
• Which annuity type guarantees a fixed number of payments regardless of survival?
• Which policy type is commonly associated with juvenile life insurance and a Payor Benefit rider?
• Producers must complete a total of ___ Continuing Education credits for each two-year licensing period.
• What is a rider for a child term?
• What does the policy loan provision allow a policy owner to do?
• Which of the following is the best example of a limited pay life insurance policy?
• Which of the following is a person who negotiates an insurance contract on behalf of an insurer?
• A contract of adhesion is best described by which characteristic?
• A policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation?
• In a viatical settlement, what prognostic information is commonly included in the disclosure packet?
• Under a Modified Endowment Contract, which feature is generally not taxed?
• An applicant's character and personal habits can be obtained for underwriting purposes from which source?
• Which term best describes an endorsement that changes the policy's provisions but does not replace the contract?
• What does non-medical or simplified issue underwriting entail?
• What is a rider in life insurance terms?
• When does the contestability period typically end?
• Which is considered a major tax advantage of life insurance?
• A Modified Endowment Contract (MEC) is best described as
• What does a waiver of premium rider do?
• Term to permanent conversion: what is a key feature of this option?
• What is the primary reason for buying an annuity?
• Which statement correctly describes a fixed period settlement option?
• Which statement about the contestability period of a life insurance policy is true?
• A survivorship life policy is designed to pay upon the death of which person?
• If a policy loan is outstanding and not repaid, how is the death benefit affected?
• Which of these factors helps determine an insured's life insurance premium?
• Cash value vs death benefit: which statement best describes?
• Which item is normally included in a life insurance policy summary?
• Which document is used to summarize the master policy's coverage for a group, indicating the group’s benefits?
• Which of the following is NOT a characteristic of a Group Life Insurance Plan?
• In the Needs Approach, what must be determined to calculate the life insurance need?
• Fixed period settlement options are considered to be a form of a(n)?
• Which statement best describes a typical field underwriting practice?
• An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)
• Who typically owns a group life policy?
• Who receives the death benefit if the primary beneficiary cannot or will not receive it?
• What is the purpose of the free-look period in a life insurance policy?
• Who owns an individual life policy?
• When reinstating a lapsed policy, which of the following is typically required?
• How is the death benefit affected when a policy loan balance is outstanding?
• Which option is a nonforfeiture option?
• A limited payment whole life policy provides what kind of protection?
• When collecting insurance premiums from a client, a producer MUST
• In Pennsylvania, completion of continuing education is required upon license renewal for which of the following?
• In an insurance contract, the value exchanged between the parties is called
• During the accumulation period, who can surrender an annuity?
• When an applicant for a producer's license has a principal place of residence or business location in Pennsylvania, for licensing purposes the State of Pennsylvania is known as the
• Term-to-permanent conversion underwriting: which statement is TRUE?
• What term describes the tendency of individuals with higher loss exposure to purchase insurance more often than those at average risk?
• What does extended term nonforfeiture option do?
• Which statement best describes fixed versus flexible premium?
• What happens to interest earned if the annuitant dies before the payout start date?
• Which of these is NOT a characteristic of the Accelerated Death Benefit option?
• Underwriting may rely on which type of report to assess an applicant's character and personal habits?
• If the insured dies by suicide within the stated period, what is typically paid under the suicide clause?
• Which type of life insurance is normally associated with a Payor Benefit rider?
• Under an irrevocable beneficiary designation, what must happen to change the policy?
• Which statement is true about life insurance proceeds for federal income tax purposes?
• What is insurable interest?
• Which rider allows adding spouse and child to the insured's coverage?
• Which type of policy is described as a permanent policy with a cash value account earning interest and a flexible premium?
• Which statement best describes a common business use of life insurance?
• Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them?
• Which policy type blends insurance with investment components and has cash values tied to investment performance?
• If the insured's age or gender was misrepresented, what action may the insurer take?
• The two major actions required for a policyholder to comply with the Reinstatement Clause are
• What does the Entire Contract clause require?
• Which statement best describes how life insurance creates an immediate estate?
• Under the common disaster provision, when the insured and the beneficiary die in the same accident, the insurer will continue as if
• A whole life policy option where extended term insurance is selected is called a(n)
• In Pennsylvania, to receive death benefit proceeds when the beneficiary is a minor, what must be appointed?
• A settlement option determines how the death benefit is paid to beneficiaries.
• Who has the authority to deny or revoke a license for an insurance producer?
• Which of the following would be an unfair life insurance advertising practice?
• What is the purpose of the incontestability clause in a life insurance policy?
• What does an accelerated death benefit rider do?
• Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because
• What happens if death occurs during the grace period after a missed premium?
• ______ is NOT an element of a valid contract.
• Which underwriting class indicates better-than-average risk with typically lower premium?
• If age was misstated on the application, the death benefit amount is based on
• What is the difference between group life and individual life?
• What is universal life insurance?
• Which market index is normally associated with an indexed annuity's rate of return?
• What happens to the death benefit if the insured is diagnosed with a terminal illness under accelerated benefits?
• Agreements by terminally ill persons to sell their life insurance policies at a discount to pay medical expenses are called:
• Misrepresentation on application effect?
• What is the primary purpose of an Assignment clause in a life insurance policy?
• Which is a Living Benefit option in a life policy?
• Which method estimates the amount of money needed to support dependents after the death of the breadwinner?
• Insurance companies determine risk exposure by which of the following?
• Regarding the 10% early withdrawal penalty for qualified plans, which statement is true?
• Reduced paid-up nonforfeiture option uses cash values to purchase a paid-up permanent policy with a smaller face amount but no further premiums.
• In what part of an insurance policy are policy benefits found?
• Under a Traditional IRA, interest earned is taxed
• During the first two years a life insurance policy is in force, the insurer may contest a policy for all of the following reasons EXCEPT
• What is a key benefit of non-medical underwriting compared to fully underwritten policies?
• Disability income rider provides what?
• Which of the following is required by ethics and fiduciary duties?
• Which provision states that a copy of the application must be attached to the policy when issued?
• What is the effect of pre-existing conditions on underwriting?
• Which of the following is NOT listed as a common dividend option for participating policies?
• Which retirement plan does NOT qualify for a federal income tax deduction?
• Why do pre-death distributions from a MEC receive different tax treatment than other life insurance policies?
• What is the role of the Pennsylvania Department of Insurance in life products?
• Under the incontestability clause, which exceptions allow contesting after the stated period?
• What is an insurance policy's grace period?
• Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
• Life income settlement provides periodic income payments to the beneficiary for life or for a guaranteed period.
• Which rider provides a monthly payment to compensate for total and permanent disability?
• If an insured's age is misstated, the death benefit is calculated as
• In variable life insurance, who bears the investment risk?
• Which rider pays a monthly benefit if the insured becomes totally disabled?
• A temporary annuity certain would pay income for a fixed period regardless of survival.
• Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
• In a tax-deferred annuity, earnings grow until retirement. Which phase is described?
• In a life insurance illustration showing future premiums paid from nonguaranteed values, what must be disclosed?
• What is the typical duration of the free-look period?
• The type of multiple protection coverage that pays on the death of the last person is called a(n)
• Which statement about replacement is true?
• A rollover from a Traditional IRA to another IRA must be done within how many days to avoid tax consequences?
• Which of these is NOT considered to be a common life insurance nonforfeiture option?
• Misrepresentation in the application process.